State's Failure To Make Full Pension Payments Hinders Fund

 

As reported by nj.com, public pension funds may have gotten a much-needed boost from Governor Chris Christie’s landmark overhaul last year, but reports released show the funds continue to be hampered by the State’s failure to make full payments into the plans. 

Christie and Democratic leaders joined together last year and shifted a greater share of the pension costs on to public workers and cut out cost-of-living increases for future and current retirees. The move helped drive the State’s nagging unfunded pension liability from $53.9 billion to $36.3 billion when they revised 2010 figures, the report shows. 

But the State’s pension hole grew by $5.5 billion by the end of the 2011 budget year, largely because Christie followed in the tradition of his predecessors and failed to make a pension payment, an annual actuarial report on the pension funds shows. Overall, the State has only 67 percent of the money it needs to meet its future pension obligation, and that figure is expected to worsen as the State phases in its full pension payment over the next seven years.

The State was supposed to pay about $3 billion into the pension fund this year, but will only be paying about $480 million. Next year, the State will only pay about $900 million of its $3 billion bill, records show.

By 2018, State taxpayers will begin paying more than $5 billion a year for pensions, roughly ten times higher than the partial payment being made in this year’s budget, according to administration estimates. The tab for local taxpayers will rise by about $600 million by 2020, estimates show.

NJ Lawmakers Asks For Gov. Christie To Compromise On Sick-Leave Payouts For Public Employees

 

As reported by nj.com, the sponsor of a bill to end five and six figure sick-leave payouts for retiring public employees in New Jersey is calling on Governor Chris Christie to sign compromise legislation.

Senator Paul Sarlo of Bergen County told The Associated Press the Governor is holding up the bill over a relatively small difference that would end unlimited payouts for all future employees. On Monday, Christie said he is unlikely to compromise.

The sticking point is over whether to eliminate the sick time’s cash value, as Christie wants. Sarlo wants retiring employees to cash out a nominal amount to discourage employees from using up their sick-leave every year. Christie vetoed legislation a year ago that would have capped the payouts at $15,000. Democrats then offered to reduce the cap to $7,500.

NJ Has Lowest Number of Public Workers In Eight Years

 

As reported by nj.com, with a flood of retirements, the sluggish economy, and a governor intent on shrinking the size of government, the number of public workers in New Jersey has dropped to its lowest level in eight years, a Star-Ledger analysis shows. New Jersey shed about 29,100 state and local government jobs during Governor Chris Christie’s first 19 months in office, trailing only New York and California in the total number of public sector jobs lost, according to federal labor statistics.

The latest figures, released earlier this month, show the state has fewer public employees-from police and teachers to college administrators and state workers-on the payrolls than at any other point since September 2003. In fact, New Jersey’s sizable decline accounts for more than 8 percent of the 357,100 public sector jobs lost in states across the country since January 2010, the month Christie took office.

The loss of public sector jobs comes as New Jersey’s post-recession economy continues to struggle, translating into a 9.5 percent unemployment rate that is 13th highest in the nation. In recent months, Christie has recast the unemployment rate-a critical yardstick for governors-saying it’s more a measure of his success than his failures. He said the stubbornly high jobless figure is an unavoidable consequence of his mission to shrink the size of government in New Jersey.

But economists and critics argue that Christie’s outlook ignorers how the loss of so many jobs, regardless of their origin, threatens the state’s broader economy. In January 2010, there were 590,200 employees on public payrolls in New Jersey. But that has dropped by more than 5 percent, the fifth highest percentage decline in the nation. In the same time period, the total number of jobs in New Jersey-accounting for gains in the private sector and losses in public jobs-rose by 20,300. That ranks New Jersey behind 38 other states in percentage of job growth. Christie’s critics say he may have been successful at shrinking government, but he has failed to expand the economy and provide new employment opportunities.

“In previous times, the decline in public sector jobs hit administration, but these last two years we are seeing a dramatic dip in police, fire, and EMS employees because the state aid was cut,” said William Dressel, executive director of the New Jersey League of Municipalities. Police and firefighters across the state have reacted with anger, framing the issue as a matter of public safety. “Our members are being asked to do their job without the manpower necessary to get things done. And at any given time, we can go to work and not come home,” said Dominick Marino, president of the International Association of Firefighters of New Jersey.

The city of Trenton is preparing to layoff 108 officers, which union officials there say would put staffing at 1930s levels.

Gov. Christie Signs NJ Public Worker Pension and Healthcare Overhaul Bill

 

As reported by nj.com, Governor Chris Christie signed into law controversial legislation that will force public employees to pay more for their pension and health insurance. Christie, who signed the bill flanked by a bipartisan cast of mayors, said passage of the bill is his biggest legislative victory since taking office.

“It is an important moment for the State of New Jersey, for its citizens, its taxpayers and New Jersey has once again become a model for America,” Christie said at the bill signing. 

Starting on Friday, public employees across all levels of government will pay an additional percent of their pay into the pension system. Employees will begin to pay more for their health insurance when their contracts expire. For those without contracts or with contracts that have already expired, the increased payments could begin as soon as January, when new health insurance plans are expected to be completed.

The legislation took a bumpy road to passage. Christie and Senate President Stephen Sweeney began working on the proposal last fall. They faced strong pushback from the public employee unions, who argued that health benefits should be decided at the bargaining table, not through legislation. But the unions were unable to stop the bill.

Assembly Speaker Sheila Oliver got on board with the legislation earlier this month. Republican lawmakers joined a coalition of Democrats, mostly those with ties to South Jersey political boss George Norcross and Essex County Executive Joe DiVincenzo, to provide enough support to pass the bill last week.

A last-minute change to remove the most controversial provision of the bill, which would have limited access to out-of-state hospitals, was done through a separate bill, which Christie also signed.

Public Employees With 20 Years of Service Would Lock In Benefits Under Change to Proposed Plan

 

As reported by nj.com, employees with at least 20 years of service would lock in their retirement benefits under a last-minute change to the health and pension overhaul bill, according to Senate Democrats.

Under the current bill, only those employees with at least 25 years of service would have had their retirement benefits locked in, which in many cases means no cost health plans, but now that would be lowered to 20 years, according to Senate Democratic spokesman Derek Roseman.

The change will be welcome news to thousands of public workers nearing retirement age. A hearing on the bill has yet to begin before the Senate Budget Committee. The bill’s architect, Senate President Stephen Sweeney, is expected to testify and explain the changes. The bill, in short, shifts more pension and health benefit costs onto public workers. Unions argue that it interferes with collective bargaining.

NJ Assembly Holds UP Pension, Health Benefits Overhaul Brokered By Christie, Sweeney

 

As reported by nj.com, Governor Chris Christie and Senate President Stephen Sweeney were poised to announce an agreement on a plan to overhaul health and pension benefits for public employees, but were stymied after the compromise received a chilly reception in the Assembly. “We are not there yet,” said Speaker Sheila Oliver, who found herself wedged between two of the state’s most powerful politicians.

Word of the agreement also drew quick opposition from public labor unions across the state, who said it represented an attack on collective bargaining rights by taking away their ability to negotiate health benefits. 

The plan would require the state’s 500,000 public employees to contribute more money for their pensions and health benefits than they currently do and freezing cost-of-living adjustments for retirees until the pension funds stabilize. The overhaul, which lawmakers have agonized over since Christie took office a year and a half ago, would address two of the most costly issues facing the state.

New Jersey has promised $66.7 billion in medical benefits to current and future retirees, the highest tag among the 50 states, but has not set aside a single penny to pay for it. At the same time, the state has about 66 percent of the assets needed to meet its future pension obligations, ranking it among the worst funded in the nation. 

Oliver outlined the plan to caucus members in a closed-door meeting, where many told her that while changes in the pension plan were needed, they agreed with union leaders that the health benefits should be negotiated and not legislated. More than a dozen union leaders stood outside the room where the Assembly Democrats had gathered, hoping the members of lower chamber would provide a bulwark against the part of the package that addresses health benefits.

Facing a similar lack of support, Sweeney has lined up a small group of Democratic senators who have agreed to join with Republicans to make sure there are enough votes to pass the overhaul, which will be wrapped up in one bill. In a written statement, Sweeney said the plan would save taxpayers $120 billion over an unspecified period of time, while protecting the pensions and health benefits of low- to middle-income workers. Notably, the statement did not include any details about the plan, such as how it would save taxpayers $120 billion.

Deal to Change NJ Public Workers' Pensions, Benefits Is Struck by Christie, Sweeney

 

As reported by nj.com, public workers would pay more for their pension and health benefits under a deal struck between Governor Chris Christie and Senate President Stephen Sweeney. Under the deal, most public workers would immediately pay an additional 1 percent of their salaries for their pensions, while police and firefighters would pay an additional 1.5 percent. The State would pledge to increase its pension contributions to legally required levels.

Workers would pay up to 30 percent of their health care premiums after a four-year period. But, unlike Governor Christie’s original proposal, the payments would be tiered based on income, so employees with lower salaries pay less.

CWA New Jersey Director Hetty Rosenstein declined to discuss the specifics of the proposal, but said she’s opposed to legislation that “undermines collective bargaining.” “This proposal attacks collective bargaining. It’s absolutely unaffordable. And it does not one thing-there’s no indication that it does anything to address the high cost of health care,” she said. 

Public unions want health benefits to be decided through collective bargaining, not legislation. “We feel there is an avenue in the Assembly where we can protect our collective bargaining rights,” said Dominick Marino, president of the Professional Firefighters Association of New Jersey.  

Assemblywoman Joan Quigley said there is vocal opposition to health benefits legislation inside her caucus. “The Assembly is really just learning for the first time of the deal. There are millions of questions, and right now I don’t think there’s a consensus either way,” she said.

NJ Public Workers Continue to Retire At Record Rate

 

As reported by nj.com, for the second year in a row, public employees across New Jersey are retiring at a record rate, state figures show. Nearly 15,000 public workers are expected to retire from January through the end of July, a slight increase from the same period last year, when a record number of state employees left their jobs.

The steady rise in retirements comes amid economic uncertainty, with changes in pension and health benefits for public employees remaining at the top of the state’s political agenda. As a result, an increasing number of the more than 500,000 state and municipal employees are choosing to retire rather than risk having their benefits cut by legislators.

“People have a certain set of expectations, and at some point, it just makes sense to retire,” said Jim Ryan, a spokesman for the state Policemen’s Benevolent Association. Ryan said retirements, combined with layoffs, have left police departments across the state understaffed and in many cases without the streetwise experience needed to conduct adequate investigations.

The numbers provided by the state Treasurer’s office show that State Police officers are also retiring at a record pace, a trend that the superintendent recently told a state Senate committee was disturbing. By the end of July, records show, 144 state troopers are expected to retire, significantly higher than any 12-month period since at least 2000. In the previous decade, an average of 61 state troopers retired each year.

Overall, more than 20,000 public workers retired last year, a 60 percent increase over 2009 and the highest number in at least a decade, according to the state Department of the Treasury. The unexpected surge may eventually force the state to pay more money into its troubled pension fund. Every three years, the state examines such assumptions as retirement rates and employee levels, which serve as the basis for pension payments, and adjusts accordingly. The next study will look at the three-year period from June 2008 to June 2011, when retirements jumped.

While public employees ponder whether to remain at their jobs or retire and lock in their benefits, Governor Chris Christie and Democratic leaders are trying to work out the details of health and pension reform. Under all of the proposals that have been floated so far, public employees who have spent a prescribed amount of time on the job, generally 25 years, would not have their benefits cut upon retirement.

Rev. Al Sharpton Criticizes Governor Christie

 

As reported by nj.com, the Reverend Al Sharpton stepped into New Jersey’s budget battle, joining a chorus of union leaders criticizing Governor Chris Christie’s economic policies and urging New Jerseyans to push back against a nationwide campaign to weaken organized labor. At rallies in Newark, Trenton, and Vineland, Sharpton said the state would be violating its workers’ civil rights if it reneges on its pension commitments. He also chastised Christie for feuding with teachers, and warned that governors across the country are on a mission to balance their budgets at the expense of the working class.

“We can cut back people’s pensions. We can lay off workers. We can close hospitals, schools, psychiatric centers. We can deal with changing tenure for teachers-but don’t touch the rich,” Sharpton said at Shiloh Baptist Church in Trenton. “They have become the sacred cow that can’t be touched…while workers become the slaughtered lamb.”

Two national union leaders joined Sharpton onstage and blamed Wall Street’s recklessness for the budget deficits afflicting Wisconsin, Indiana, Ohio, New Jersey and other states where governors have squared off with unions. “That’s what this coordinated attack is. It’s saying to workers, ‘I know you didn’t create the problem, but you solve it,” Randi Weingarten, president of the American Federation of Teachers. “That’s what we’re fighting.”

Christie has called for an overhaul of the state’s pension and health benefits systems for public workers, but has yet to hammer out a deal with the Democrats in control of the Legislature. The two sides have until June 30 to settle on a budget deal for the coming fiscal year. In recent weeks, that debate has been a bitter back-and-forth, with the governor accusing the Legislature of inaction at this town hall events while Democrats fight back in their budget hearings. At the Trenton rally, two Assembly Democrats said Christie was bullying the working class to burnish his conservative credentials.

At the rally in Newark, Sharpton urged 150 anti-violence activists, clergy, and workers to unite against the governor’s efforts to undermine organized labor and implement damaging economic policies. “We have fought governors before and we will stand up to this one,” he said.

Unions have staged several rallies in Trenton this year echoing Sharpton’s message, including one headlined by the AFL-CIO national president in February that drew more than 3,000 people.

Christie Estimates Changes in Employee Benefits Will Save $870M Per Year

 

As reported by nj.com, Governor Chris Christie estimates his plan to overhaul the state’s public employee health benefits system will save more than $870 million a year by 2014 by shifting significant percentage of the costs to employees and future retirees, according to the Treasury Department.

In the most detailed explanation of the proposal to date, Treasury spokesman Andrew Pratt said the governor wants to gradually increase state employee health benefit contributions over three years, requiring them to pay 10 percent of premiums this July and climbing to 30 percent by July 2014. New workers would immediately pay 30 percent. Currently, state employees pay 1.5 percent of their salary for medical benefits. Most Democratic lawmakers and budget observers believed Christie wanted employees to start paying 30 percent of their premiums immediately and assumed that was how he justified savings of $370 million in his proposed state budget.

In response to requests from The Star-Ledger, the administration says the final tally is more than $870 million and the proposal would involve much more than increased contributions, such as tiered plans, increased co-pays and lengthening the eligibility requirements for post-employment health care. The savings represent about one-third of the $2.5 billion the state expects to pay in employee medical costs this year, Pratt said. They would also dwarf initial estimates of a proposal by Senate President Stephen Sweeney, who wants contributions to be based on salary.

Democratic lawmakers who were already skeptical about the $370 million in savings in the proposed budget expressed more disbelief about the latest figures, with the chairman of the Senate Budget Committee calling them “ridiculous.” The Christie plan would not change payouts for current retirees and workers with at least 25 years on the job when the measure takes effect would not be required to pay more when they retire. But, all others would have to pay 30 percent after they retire and workers would not be eligible for post-retirement health coverage unless they work for 30 years, up from 25 years.

With no Republican bill and a lack of Democratic support for Sweeney’s proposal, Christie’s budgeted $370 million in health benefit savings is on shaky ground. It is one of several uncertainties in the governor’s budget. The State Supreme Court is considering whether Christie needs to restore up to $1.6 billion in education cuts and the administration has yet to explain how it plans to achieve $300 million in Medicaid savings through a federal waiver, which faces layers of approvals. “There could be a lot of problems,” said Assembly Budget Committee Chairman Lou Greenwald. “I hate to see him strike out on all three of these.”

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Recently Released Salary Figures Are Backdrop To Impending Contract Negotiations

 

As reported by trentonian.com, New Jersey’s state government unions are up against more than a combative Governor Chris Christie going into contract negotiations. They are up against numbers regarding their salary, which were recently released and could complicate their efforts to rally public opinion to their side.

More than 17,000 union represented state employees have salaries of $75,000 or higher. They account for a record 75 percent of total employees in this pay range, including management and patronage employees. Union represented employees now hold 43 percent of jobs paying $100,000 or more, also a record proportion. These Civil Service figures are as of January 1, 2010.

The two biggest of a dozen state employee unions are the Communications Workers of America, representing about 37,000 employees, and the American Federation of State, County, and Municipal Employees (“AFSCME”), bargaining for about 9,900 state workers. Governor Christie has declared himself ready, even eager, to do some hard-nosed negotiations. He served notice at a recent town meeting that unions should not expect him to join them in “holding hands” around the bargaining table and singing “Kumbaya.”

Union representatives have no such expectations. “We’re aware of the [fiscal] situation and public mood,” said one AFSCME member, not authorized to speak for the union and commenting anonymously. “We’re not looking for a sweetheart contract or expecting one. We’re looking for a fair contract, one that doesn’t shift all the burden onto us.”

CWA says it has made concessions previously, contrary to the impression given by the blustery Christie. These concessions included a deferral of a scheduled raise in 2009, the acceptance of a pay cut in the form of uncompensated furlough days, and an agreement to take on a bigger employee share of pension and medical-coverage costs. 

New Jersey’s contract talks open at a time when states face big annual budget shortfalls and massive unfunded long-term liabilities in promised pension and health benefits. New Jersey liabilities by one official calculation surpass $120 billion, four times the annual state budget. Other calculations set the sum even higher.

Wisconsin Governor Scott Walker, a Republican, has positioned himself in the center of America’s public sector labor battle zone. He’s proposing to sharply curtail bargaining parameters, including taking benefits off the table. He also proposed to stop payroll deductions for union dues, forcing the unions to collect their own dues, a potentially crippling blow to them financially. Christie has stopped short of going that far. But, he has drawn the national limelight, alongside Walker, with his union-taunting remarks and stated willingness to go to the mat.

Unions Say Bill on Healthcare Contributions Would Hurt Collective Bargaining Power

 

As reported by nj.com, leaders of New Jersey’s public workers unions said they will launch a full court press against a bill sponsored by Senate President Stephen Sweeney that would force public employees to pay more for their health care benefits. The unions have called the bill an attempt to throw out collective bargaining rights.

Hetty Rosenstein, state director for the Communication Workers of America, said her union would picket, extract pledges from lawmakers to oppose it and hold “lobby days” against the bill over the next several weeks. “It becomes illegal to negotiate anything different than what’s in that bill,” she said. “It preempts all collective bargaining.”

Bill Lavin, president of the state Firefighters Mutual Benevolent Association, said police and firefighters will protest it at a Statehouse rally and press all 120 lawmakers. “It’s totally unacceptable. I think if that were to pass, it will guarantee that the Democrats will lose the majority,” he said. “We’re shocked that Steve Sweeney, who calls himself a Democrat, would act in this manner…He’s rolled over for the governor in every instance.”

The pushback comes as the legislation has gained bipartisan support in the state Senate, with Jennifer Beck (R-Monmouth) signing on as a prime sponsor. Public employees pay 1.5 percent of their salaries towards their health benefits. Under Sweeney’s plan and a proposal by Governor Chris Christie, workers would pay a portion of their premiums instead and would have more plans to choose from.

Under Christie’s plan, public workers would pay 30 percent of their premiums within three years. Under Sweeney’s, they would pay a sliding scale based on income, with the highest earners eventually paying 30 percent. Christie’s plan would require current retirees to pay part of their premiums.

Beck said she still has reservations about parts of the bill. She agreed with Sweeney that employees should pay rates based on their income, but agreed with Christie that current retirees should pay part of their premiums. Christie spokesman Kevin Roberts said the governor’s office was not upset that Beck signed onto the Democratic proposal.

Gov. Christie Goes After State Worker Benefits to Fund Tax Cuts & Credits

 

As reported on trentonian.com, New Jersey Governor Chris Christie held fast to his national reputation for fiscal discipline amid the widespread financial crisis that has hit the United States, unveiling a $29.4 billion state budget that calls for heftier contributions from state workers for pension and health care benefits.

Christie proposes paying $500 million into the state’s severely underfunded pension system, the minimum required under a new state law to get the state to quit skipping its payments. But Christie says he’ll make the payment only if the Democratic Legislature agrees to reforms that require government workers to delay retirement and pay more. Union workers, a powerful Democratic constituency in a legislative election year, oppose the plan.

Christie’s carrot-and-stick budget plan also targets public workers’ health care. His plan calls for additional property tax credits to poor, disabled and senior households, but only if the Legislature significantly increases public workers’ health insurance contribution. Specifically, Christie wants legislation that would push one-third of the cost of health insurance onto state workers by 2014, up significantly from the 1.5 percent of their salary they pay now. Christie would apply the $323 million in savings to property tax relief for low-income, senior and disabled homeowners.

Unions plan to rally at the Statehouse on February 25, 2011 in support of public workers in Wisconsin, where protests have erupted over collective bargaining rights and public employees’ benefits are among the issues raising ire. In a speech at the American Enterprise Institute in Washington, Christie urged elected officials to follow his example in addressing spending and debt, and big-ticket items such as pensions and other benefits. “It’s time to do the big things-the really big things,” he said.

In New Jersey, Democratic leaders in the Legislature complained that Christie, through his budget, pits one group of middle-class residents against another. However, the League of Municipalities, an association of municipal mayors, says it’s pleased Christie’s budget proposal holds the line on spending and aid to towns.

Senator Sweeney to Unveil Bill Requiring State Employees to Contribute More for Medical Benefits

 

As reported by nj.com, Senate President Stephen Sweeney will unveil a plan that aims to slash the State’s huge medical costs by requiring public employees to kick in significantly more to health benefits, according to three officials familiar with the proposal.

The Sweeney plan shares much common ground with Governor Chris Christie’s reform agenda and signals significant momentum in Trenton for sweeping changes to public medical benefits. Sweeney is expected to unveil the plan at the Statehouse on February 15, 2011, one week before Christie delivers his proposed budget to the Legislature.

The Democrat’s plan would provide immediate savings and as much as $1 billion annually within seven years, according to the officials, who requested anonymity because they were not authorized to speak publicly on the proposal. Under Sweeney’s proposal, all public employees would pay a percentage of their premium instead of the current system that requires them to pay at least 1.5 percent of their salary. The increases would be phased in over seven years and would be applied on a sliding scale depending on the employees’ salary. 

For example, in the first year, public employees who make less than $30,000 would pay 2 percent of their premium, while those who earn more than $100,000 would pay 12 percent. When fully implemented after the seventh year, the lowest income workers would pay 12 percent of their premiums, while top earners would pay 30 percent. The annual payments would range from $2,280 to $5,700 a year.

Christie has called for all public employees to pay 30 percent of their premiums on a gradual basis, regardless of income. Current retirees, most of whom pay nothing for their medical benefits, would not be subject to the increase under both the proposals advanced by Christie and Sweeney. All increases would go into effect at the start of the next union contract. Like Christie, Sweeney will also call for the creation of a multi-tiered benefit plan where employees can pay less for less coverage and more for increased coverage.  

Unlike the laws governing public pension plan that typically require payments each year to fund the current and future costs, retiree medical benefits rules allow states to “pay as you go,” which means they pay on the current cost each year and ignore the long-term price tag. For New Jersey, that long-term price tag is nearly $67 billion, about $13 billion more than the State’s pension deficit. While the pension funds have $48 billion on hand, the State has not saved a dime for medical benefits.

New Jersey has the highest unfunded liability and annual medical benefit costs in the nation, according to an analysis by the Center for State and Local Government Excellence. As of the latest report, there are 394,521 active and retired employees enrolled in the state-administered health benefit plan. This includes active and retired employees from municipalities and school districts who participate in the state plan. Under Sweeney’s proposal, towns would be temporarily blocked from joining the state system to help the fund stabilize.

Suspension of Hudson County Corrections Officer Upheld

 

On August 17, 2009, the Appellate Division decided In the Matter of Juan Melendez, Docket No.: A-4617-07T1. In the case, Juan Melendez, a Hudson County Corrections Officer, appealed from a final administrative determination of the Merit System Board (“Board”) imposing a fifteen-day suspension for neglect of duty and other sufficient cause warranting discipline.

The Board adopted the initial determination of an Administrative Law Judge on a remand following his first determination that the suspension should only be for three days following Hudson County’s suspension of thirty days. On appeal, Melendez argues that: (1) the decision of the Board upholding the charges is not supported by credible evidence in the record; (2) the penalty of a fifteen day suspension is at odds with the concept of progressive discipline and appellant’s prior disciplinary history; and (3) he is entitled to attorneys’ fees based on having prevailed on all or substantially all of the primary issues.

The testimony before the ALJ revealed that Sgt. Kevin Orlik reported, and testified, that Melendez was asleep at his post in a trailer annexed to the jail on March 19, 2006 when Orlik and other officers arrived to conduct a search of the cells. In his testimony, Orlik testified that when he entered the trailer he “saw Officer Melendez reclined back in a chair with a roll of toilet paper as a pillow or cushion behind his neck,” “his eyes were closed,” and he was “motionless” as he was observed “for approximately a minute to two minutes” until other officers entered the trailer and started to make noise. Melendez testified that he wasn’t sleeping and told that to Orlik when he directed Melendez “to write a report on why [he] was sleeping.” Melendez challenged Orlik’s credibility by noting that his written report omitted details embodied in his testimony.

There was also testimony about the practice of standing when a superior officer enters the room. Melendez did not do so on the night in questions, and testified that it wasn’t a “regular routine” and he generally did not do so. Although the failure to stand was not itself a basis for discipline, it was determined to be relevant to the issue of “attentiveness” at the time, as well as to the ALJ’s finding that the inattentive conduct was a “sufficient cause” for the three-day suspension he initially imposed.

On the remand, despite making credibility determinations against Orlik because of the failure to include certain details in his written report, the ALJ found neglect of duty and “other sufficient cause” for the discipline, and found that “the failure to stand and acknowledge Sgt. Orlik’s when he entered the trailer to constitute being inattentive.”

 

In its opinion, the Board agreed with Melendez that “his failure to stand was not a specific infraction or charge,” but concluded that it constituted “evidence that he was inattentive, which he was charged with,” and “[i]t was the appellant’s inattentiveness that constituted his neglect of duty as it could have resulted in harm to the inmates.”  

The Appellate Division affirmed the determination of the Board in its entirety. The Court agreed with Melendez that the failure to stand when Orlik entered the trailer was neither a basis for the disciplinary charges nor can be a basis by itself for disciplinary action. However, the Court noted that it could be considered by the Board to be part of the overall neglect of the circumstances by Melendez. His response to the entry of a superior officer was relevant to whether he was paying proper attention and was sufficiently attentive to his circumstances. While it may not be a specific violation for not standing when a superior officer entered the trailer, the Court did not disagree that the subject related to Melendez’s “inattentiveness,” and “[i]t was the appellant’s inattentiveness that constituted his neglect of duty as it could have resulted in harm to the inmates.” 

The Court also determined that the discipline imposed cannot be considered “shocking to one’s sense of fairness,” although the Court may have reached a different result. Lastly, the Court found that the Board did not abuse its discretion in determining that Melendez did not prevail on “substantially all of the primary issues,” and thereby denying him counsel fees. Some of the charges were sustained and a fifteen-day suspension was imposed on the Board’s review and, therefore, the Court agreed with the Board that Melendez was not entitled to fees despite the reduction of fifteen days of the suspension.

Unions' Grievances Regarding Employer's Change in Benefit Plans Subject to Arbitration

 

On July 2, 2009, the United States Court of Appeals for the Third Circuit decided United Steel v. E.I. Dupont de Nemours and Company, No. 08-1911. In two consolidated cases, Plaintiffs are unions who were seeking to compel Defendants, employers of the unions’ members, to arbitrate Plaintiffs’ grievances about unilateral changes the Defendants made to employee benefit plans. In both cases, the lower court granted summary judgment in favor of the unions on the grounds that: (1) a collective bargaining agreement (“CBA”) between the parties provided for arbitration; and (2) there is no strong and forceful evidence that the parties intended to exclude these disputes from arbitration. 

In appealing the lower courts’ determinations, Defendants contended that the Plaintiff’s grievances are disputes over benefit eligibility and, thus, should be resolved using the dispute resolution provisions of the Summary Plan Description rather than the CBA. Moreover, Defendants argued that ERISA, which governs the employee benefit plans maintained by Defendants, mandates that benefit eligibility disputes of this nature should be resolved by the designated ERISA fiduciary.

In affirming the determination of the lower courts, the Third Circuit noted that the arbitration clauses in the CBAs at issue were broadly worded. Specifically, the New Jersey CBAs provide for arbitration of grievances “relating to the interpretation or to any alleged violation” of those CBAs, while the Delaware CBA provides for arbitration of “[a]ny question as to the interpretation, or any alleged violation, of any provision of” that CBA. There was no express provision in any of the CBAs that excluded Plaintiffs’ grievances. Therefore, a presumption of arbitrability applied and Defendants could only overcome this presumption by showing forceful evidence of a purpose to exclude these claims from arbitration.

The Court determined that there was no forceful evidence that the parties did not intend to submit these disputes to arbitration. In rejecting Defendants’ argument which characterized the grievances as disputes about “benefit eligibility”, the Court found the disputed issue is not whether any particular employee was eligible under the terms of the plan, but rather whether Defendants violated the CBAs by unilaterally modifying its terms. Moreover, the Court noted that were it to accept Defendants’ characterization of the grievances, this would eliminate any opportunity for a meaningful challenge to Defendants’ unilateral plan amendments and thereby thwarting the CBAs’ arbitration clauses. As such, the Court affirmed the determination of the lower courts.

CWA Ratifies Revised Contract

Employees in New Jersey’s largest state-worker union overwhelmingly ratified a revised contract agreement on Tuesday, June 30, 2009 that defers a raise and trades furloughs this year for future vacation days. With a little over 13,000 votes cast online or by phone by the deadline, the margin was 69 percent to 31 percent according to the Communication Workers of America. All four bargaining units, those represented clerical workers, professionals and two tiers of supervisors, voted for the revised deal, which bars layoffs until 2011. 

Workers in the CWA, which covers about half the state’s workforce, agreed to defer a 3.5 percent raise that was due July 1, 2009 by 18 months; they will get two 3.5 percent raises in fiscal 2011. Workers also agreed to nine furlough days over the coming year, on top of one taken in May. In exchange, they receive seven days off from work they can take starting in July 2010 or cash out when they leave state employment, at their pay rate at that time. 

The State agreed not to layoff any workers until January 2011 or add more unpaid furloughs before July 2011. If the State lays off any worker before January 2011, not counting any fired for disciplinary reasons or for cause, all state workers immediately get the deferred 3.5 percent raise and no further furloughs are required.

Workers due to receive increment raised in fiscal 2010 based on their years of service will get those increases. The nine unpaid furlough days include the day after Thanksgiving this year and Lincoln’s Birthday in 2010. The other seven dates will be worked out by workers and their supervisors and must be taken by the end of June 2010.

Republicans, who are hopeful that Governor Corzine will be replaced in this fall’s election, said the agreement ties the hands of the next governor to deal with next year’s multi-billion dollar deficit. “The governor did not need to negotiate these costly, election-year concessions. The courts had upheld his right to furlough workers as he originally proposed. The governor traded a plan that would have saved money during a recession for one that may very well slow the state’s recovery,” said Senate Minority Leader Thomas Kean, Jr., R-Union.

U.S. Supreme Court Rules for White Firefighters Over Promotions

 

On June 29, 2009, the U.S. Supreme Court ruled that white firefighters in New Haven, Connecticut were unfairly denied promotions because of their race, reversing a decision that high court nominee Sonia Sotomayor endorsed as an appeals court judge.

New Haven was wrong to scrap a promotion exam because no African-Americans and only two Hispanic firefighters were likely to be made lieutenants or captains based on the results, the Court said in a 5-4 decision. The city said that it had acted to avoid a lawsuit from minorities.

The ruling could alter employment practices nationwide and make it harder to prove discrimination when there is no evidence it was intentional. “Fear of litigation alone cannot justify an employer’s reliance on race to the detriment of individuals who passed the examinations and qualified for promotions,” Justice Anthony Kennedy said in his opinion for the Court. He was joined by Chief Justice John Roberts and Justices Samuel Alito, Antonin Scalia, and Clarence Thomas.

In dissent, Justice Ruth Bader Ginsburg said the white firefighters “understandably attract this court’s sympathy. But they had no vested right to promotion. Nor have persons received promotions in preference to them.” Justices Stephen Breyer, David Souter, and John Paul Stevens signed onto Ginsburg’s dissent, which she read aloud in Court.

The decision had its origins in New Haven’s need to fill vacancies for lieutenants and captains in its fire department. It hired an outside firm to design a test, which was given to 77 candidates for lieutenant and 41 candidates for captain. Fifty six firefighters passed the exams, including 41 whites, 22 blacks and 18 hispanics. Of those, only 17 whites and two whites could expect promotion. 

The city eventually decided to not use the exam to determine promotions. It said it acted because it might have been vulnerable to claims that the exam had a “disparate impact” on minorities in violation of the Civil Rights Act of 1964. The white firefighters said the decision violated the same law’s protection on intentional discrimination.  

The city declined to validate the test after it was given, a step that could have identified flaws or determined that there were no serious problems with it. In addition, city officials could not say what was wrong with the test, other than the racially skewed results. 

Justice Kennedy said, “The city could be liable for disparate-impact discrimination only if the examinations were not job related” or the city failed to use a less discriminatory alternative. We conclude that there is no strong basis in evidence to establish that the test was deficient in either of these respects.” 

Alternatively, Ginsburg said the court should have assessed “the starkly disparate results” of the exams against the backdrop of historical and ongoing inequality in the New Haven fire department. As of 2003, she said, only one of the city’s 21 fire captains was African-American.

Until this decision, Ginsburg said, the civil rights law’s prohibitions on intentional discrimination and disparate impact were complimentary, both aimed at ending workplace discrimination. “Today’s decision sets these paired directives at odds,” she said.

CWA Tentatively Agrees to Wage Freeze and Furloughs

 

On June 3, 2009, the State of New Jersey’s largest public employee union indicated it would accept a wage freeze and unpaid furlough days to help reduce spending under a tentative deal according to Governor Jon Corzine.

Corzine called the agreement with the Communication Workers of America “very important for our budget to make sure that we get something that is a very substantial giveback.” According to Corzine, negotiations are continuing with other unions along with CWA.

Corzine stated, “There is a tentative agreement on wage givebacks and furloughs that has yet more details to be ironed out, and that has to be appropriately negotiated with other unions. I expect there will be an agreement on the terms that are negotiated at the collective bargaining table, not just with CWA but with all of the various parties that are involved.”

Although details of the deal were not provided, senior Democratic officials told the Star Ledger the pact would include ten (10) furlough days in the budget year starting July 1, along with a wage freeze and some “bankable” paid personal days that workers could take in the future.

Senate Budget and Appropriations Committee char Barbara Buono said the tentative agreement, if approved by other unions, would lead to at least $300 million in savings for the $28.6 billion budget proposed for the new fiscal year. 

Corzine imposed two furlough days before the current budget year ends June 30 and was seeking 12 more days in the new budget. Union members have protested the furloughs and criticized the Governor

New York Governor Vetoes Routine Pension Measure

 

New York Governor David Patterson dropped a bombshell on two powerful unions yesterday when he unexpectedly vetoed a routine measure that for nearly thirty (30) years had allowed New York city cops and firefighters to retire with generous pensions.

“These are not routine times,” Paterson said in vetoing the “temporary” measure that, since 1981, had been habitually renewed by legislators, giving the Finest and Bravest gold-plated pensions known as “Tier II” even as new, less-generous tiers were created for non-uniformed workers. Paterson added, “Instead of a rubber stamp on a temporary fix, we need to move forward with real reform to the pension system.”

In recent months, the New York Post has detailed the spiraling costs of public-employee pensions and the growing threat they pose to state and local budgets. Paterson’s veto, which caught the lawmakers off guard, was his most aggressive move yet in his push to establish a pared-down pension tier for newly hired employees. Recently, the governor re-introduced his cost-saving pension proposal, which legislators flatly rejected during this year’s budget negotiations. In fact, Paterson estimates that his proposal for a new pension tier would save the state $48 billion over the next thirty (30) years. 

Labor unions and their allies in the Legislature said they were blindsided by the governor’s veto and argued that state and local governments will see no savings from the move because it’s unclear which pension tiers new cops and firefighters would join. According to Civil Service Committee Chairwoman Diane Savino, who sponsored the bill, “There was no cost to extending the current system. We don’t know what the cost would be. We don’t know what the savings will be.” 

The bill passed overwhelmingly, 136-6 in the Assembly and 58-0 in the Senate, leading to talk of a veto override, which requires a two-thirds majority of each house. 

The savings would come from, among other items, raising the minimum retirement age and banning overtime “spiking,” where workers run up OT in their final years to boost pension payouts.

As one can expect, developments such as these do not bode well for public safety officers across the county, to include those of our state. As detailed in previous entries, public pension reform has become an important topic, especially during these tough economic times. This article illustrates the types of responses that are being taken by government in response to the issue and the resulting effect upon public safety officers. Please continue to check this blog periodically to ascertain updates in regard to this matter.

PERC Denies Applications for Interim Relief Regarding Furloughs

 

On May 16, 2009, the Public Employment Relations Commission (“PERC”) issued a decision in response to certain unfair practice charges and requests for interim relief filed against the State of New Jersey regarding the imposition of unpaid, “furlough” days. 

By way of background, on April 14, 2009, the Communications Workers of America, AFL-CIO (“CWA”), filed an unfair practice charge and a request for interim relief against the State of New Jersey. CWA alleged that the State committed unfair practices proscribed by the New Jersey Employer-Employee Relations Act by: (1) unilaterally imposing a reduction in the work year and compensation of employees represented by CWA by requiring them to take unpaid leave days; (2) failing to negotiate over the effects of the decision to impose involuntary unpaid leave days; and (3) conspiring with the Civil Service Commission to enact temporary layoff rules for the purpose of circumventing the State’s obligation to negotiate over staggered unpaid leave days. The charges alleged that, through these actions, the State repudiated various sections of the collective negotiations agreements it has entered into with CWA and breached its duty to negotiate over terms and conditions of employment in violation of the Employer-Employee Relations Act. Additional charges and requests for interim relief were filed between April 14 and April 29 by other employee organizations representing units of various State employees, including P.B.A. 105.

An order to show cause was executed and the return date was ultimately scheduled on May 14. Once numerous briefs, certifications, and exhibits were filed, all parties appeared on the return date.  After entertaining argument, the Commission Designee Stuart Reichman, in an extensive written opinion, denied the applications for interim relief. The Designee found that where a monetary remedy could normally be issued by the Commission in the event the furloughs were found to constitute an unfair practice, as is the case here, an injunction to prevent the institution of the furloughs is not appropriate because monetary loss does not constitute irreparable harm. As a result, the unfair practice charges will proceed in the normal course. To read the decision in its entirety, download the same from the PERC website.

Public Employees and Forfeiture of Pension Benefits

On May 14, 2009, the Appellate Division decided Harry G. Parkin v. Board of Trustees, Public Employees Retirement System, Docket No.: A-2466-07T1. In the case, Harry Parkin appealed from the final agency decision of the Board of Trustees of the Public Employee Retirement System (“Board”) resulting in the partial forfeiture of his service and salary credits. Specifically, Parkin contended that the Board failed to follow its own regulations governing partial forfeiture of pension benefits and further contended that the Board “adopted a rule regarding the partial termination of pension benefits without going through the regulatory process.” 

With the exception of a four-year break in service, from 1972 to January 1, 2004, Parkin was continuously employed in various public positions until he retired as Mercer County Chief of Staff. Based upon his veteran’s status, his service time, and additional credit he received as part of an early retirement incentive program, he had accumulated twenty-eight (28) years and nine (9) months of service credit equating to a monthly pension of $5,864.49.

On March 11, 2004, Parkin was indicted by a Federal grand jury and charged with having participated in a wide-ranging, corrupt scheme utilizing his office as Chief of Staff to defraud Mercer County and its citizens. The indictment alleged numerous acts Parkin committed in furtherance of the plan while employed as Chief of Staff. After a jury trial, in March 2005, he was convicted of all charges. In August 2005, he was sentenced to a period of ninety (90) months imprisonment.

The Board considered Parkin’s entitlement to pension benefits at its September 2005 meeting. Applying the factors set forth in N.J.S.A. 43:1-3(c), the Board determined a partial forfeiture was warranted for the period of time Parkin served as Chief of Staff, i.e., from June 1, 1994, to the date of his retirement. As a result, Parkin became ineligible for veteran retirement status and additionally lost early retirement incentives. His monthly pension was significantly reduced and he no longer qualified for lifetime medical benefits.        

Thereafter, Parkin appealed to the Office of Administrative Law, wherein he argued that the Board had arbitrarily chosen the forfeiture period to run from his first day as Chief of Staff, rather than the time his misconduct allegedly first occurred, i.e., in September 2000. The Administrative Law Judge (“ALJ”) initially recommended the Board supplement the record regarding its selection of the date upon which to commence the forfeiture period. In September 2007, the Board filed a supplementary statement of its reasons for selecting the initial date of Parkin’s employment as Chief of Staff as the operative date of forfeiture, relying heavily upon the statements made by the sentencing judge in which he outlined the nature and extent of Parkin’s criminal conduct. Subsequently, the ALJ issued his initial decision in November 2007 ordering forfeiture of all of Parkin’s service from the date he became Chief of Staff. The Board adopted the ALJ’s recommendations and this appeal followed.

 

On appeal, the Appellate Division agreed with Parkin that the Legislature intended “the date the misconduct first occurred” as the initial, operative date from which the Board “shall” order that “the accrual of pension rights terminate[].” However, the Court also noted that the Legislature also provided for the Board to specifically use its discretion and choose a different date “if termination as of [the date the misconduct first occurred] would in light of the nature and extent of the misconduct result in an excessive pension…”  

Consequently, the Court determined the Board appropriately considered the statutory factors in imposing only a partial forfeiture upon Parkin’s pension benefits. Specifically, the Court indicated the Board considered the eleven (11) statutory factors in light of all the circumstances, including the serious and pervasive nature of Parkin’s criminal enterprise. As such, the Court concluded that the determination of the Board ordering forfeiture of Parkin’s pension benefits from the first day he served as Chief of Staff until his retirement was entirely consistent with the statutory and regulatory scheme, was well-founded on the evidence in the record, and was not arbitrary, capricious, or unreasonable. Therefore, the Board’s determination was affirmed.

The case illustrates the ramifications for public employees who are involved in criminal conduct and the resulting impact upon their pension benefits. As explained above, should a public employee, to include public safety officers, be convicted of criminal charges, it is likely their pension benefits will be forfeited, either partially or in their entirety. Therefore, it is imperative that if any public employee finds themselves in this situation, they contact a qualified, experienced attorney who can maximize their pension recovery.

New Article Addresses "Public Pension Bomb" in New Jersey

On May 12, 2009, Kate Benner published an article entitled “The Public Pension Bomb” in Fortune Magazine. The article addresses how states all across the country, for many years, have been starving their retirement plans. More importantly, however, the article focuses upon how the crisis is playing out in New Jersey, where the bill is coming due and the State does not have the money to pay it.

According to Benner, the New Jersey public pension situation is dire. In June 2008, the State estimated that the plan, one of the nation’s largest covering teachers, state employees, firefighters, and police officers, had $34 billion less than it needed to meet its obligations. Since then the market value of the plan has dropped from $82 billion to $56 billion. A new estimate of underfunding is due in July.

Benner also indicated that, overall, states nationwide have shortchanged the retirement programs that cover teachers, police, and other public employees. Now, the stock market plunge has wiped out billions of dollars from already underfunded plans. California, New York, and Illinois are among the states scrambling to plug multibillion dollar holes in their pension systems. As a result, these growing obligations raise the specter of higher taxes, diminished services, or even another round of costly federal bailouts.

Lastly, the article traces a 20 year time line to figure out how New Jersey dug itself into this hole. It also delineates the steps that have been and currently are being taken to address the problem. As such, any current or retired New Jersey public safety officer should read this article in order to fully understand the problems with the New Jersey public pension system. The status of the New Jersey public pension system is vital to every resident of this state and especially crucial to public safety employees. Consequently, one must be conscious of this in order to adequately prepare for its financial impact. To read the full article, click on the following link.

Arbitrator's Decision Remanded for Clarification on Timeliness Issue

On May 4, 2009, the Appellate Division decided City of Clifton v. Clifton P.B.A. Local #36, Docket No.: A-4806-07T3. In the case, Defendant, Clifton P.B.A. Local #36, appealed from a trial judge’s decision vacating an arbitrator’s award of thirteen (13) shift differential (SD) days to police detectives. 

The trial judge ruled that, in a case in which the union’s grievance was filed eighteen (18) months after the alleged wrong first occurred, and not within the twenty (20) days provided for in the collective bargaining agreement, the arbitrator exceeded his powers when stated that he had waived the twenty (20) day contractual time limit. In reaching that conclusion, the judge discussed the Supreme Court’s decision in Board of Ed. Of Borough of Alpha v. Alpha Ed. Ass’n, a case in which the Court recognized and applied the continuing violation doctrine to preserve a late-filed grievance by the union resulting from the Board’s cessation of payment of health insurance benefits. Because the trial judge found that the arbitrator exceeded his powers in considering the matter, the judge did not render an opinion on any substantive issue raised by the parties.

On appeal, the union claimed that the award was timely pursuant to the continuing violation doctrine as recognized by the Supreme Court. The City of Clifton argued, like the trial judge, that the arbitrator did not find a continuing violation to have occurred, but rather, determined to waive the contractual twenty (20) day requirement.

The Appellate Division determined the arbitrator’s decision is susceptible to both interpretations. According to the Court, the arbitrator’s decision suggests that he nominally declined to decide the applicability of the continuing violation doctrine, instead couching his decision in terms of waiver. However, the result reached was identical to the one reached in Alpha by application of the continuing violation doctrine. Consequently, the Court remanded the matter to the arbitrator for clarification of the basis for his decision on the timeliness of the action.

 

IMPORTANT ANNOUNCEMENT: PUBLICATION REGARDING NEW JERSEY PUBLIC EMPLOYEE DISABILITY PENSION APPEALS NOW AVAILABLE

Recently, the primary authors of this blog, Frank M. Crivelli, Esq. and Donald Barbati, Esq., released a publication entitled “Taking the Necessary Steps to Win Your New Jersey Public Employee Disability Pension Appeal.” 

The publication thoroughly examines the different New Jersey Pension Systems, including the Public Employees’ Retirement System, Police and Firemen’s Retirement System, and the State Police Retirement System and the difference between accidental and ordinary disability benefits under the various pension systems. Moreover, the publication analyzes the applicable decisional and statutory law surrounding public employee disability pension appeals and articulates the necessary criteria to be satisfied and the steps one must take in order to obtain accidental and/or ordinary disability benefits.

This publication is a must have for all State of New Jersey, County and Municipal employees, especially New Jersey Public Safety Officers. Public employee disability pension law is a specialized and highly complex area of law. Should you ever find yourself in need of accidental or ordinary disability benefits, you would be hard pressed to find as useful a resource.

To obtain a free copy of the publication or, alternatively, to discuss its contents in more detail, please contact Frank Crivelli, Esq. or Donald Barbati, Esq. at (609) 890-1900 or via mail at: 2653 Nottingham Way, Hamilton, New Jersey 08619.  

 

Corrections' Officer Suspension for Buying Home With Probationer Upheld

On March 30, 2009, the Superior Court of New Jersey, Appellate Division decided the case In the Matter of Richard J. Rivera, Docket No. A-3672-07T2. In the case, Richard J. Rivera, a county corrections officer assigned to the Monmouth County Correctional Institute (“MCCI”), appealed from a final decision of the Merit System Board suspending him for ten (10) days without pay for violating Rule 4.1.28 of the Monmouth County Sheriff’s Department.

The alleged violation was based upon Rivera’s failure to disclose a relationship with a “current offender,” which includes probationers, after he purchased a home with a woman who was on probation. On appeal, Rivera contended the rule was unconstitutionally vague, both on its face and as applied to him. The Court, in rejecting Rivera’s arguments, noted that a serious conflict of interest could arise if a corrections officer maintained a close relationship with a probationer who violated his/her probation and ultimately became incarcerated. To support this, the Court cited Bowden v. Bayside State Prison, a 1993 Appellate Division case, which held, “[t]he need for proper control over the conduct of inmates in a correctional facility and the part played by proper relationships between those who are required to maintain order and enforce discipline and the inmates cannot be doubted.” Consequently, the Court affirmed the Board’s final decision and upheld the penalty imposed.

This case illustrates that correction officers who become socially and/or intimately associated with persons who are either incarcerated or on parole could be subject to discipline. As a result, all correction officers should consult their respective collective bargaining agreements and/or department policies to determine whether their particular employer places limits on fraternization with certain persons.

 

Freedom of Association Claim Permitted to Go Forward

On February 3, 2009, the United States Court of Appeals for the Third Circuit decided the case of LaPosta v. Borough of Roseland. In the case, plaintiff, Joseph LaPosta, a police officer, alleges Defendants, the Borough of Roseland and its Police Chief, retaliated against him after he attempted to join a police organization of which the Police Chief did not approve. Plaintiff’s claims were brought pursuant to 42 U.S.C. §1983 and state tort law. 

Plaintiff was employed as a police officer with the Borough of Roseland. After completing his police academy training, Plaintiff was forced to join the Fraternal Order of Police (“FOP”) union. When Plaintiff expressed an interest in joining an alternative union, the Policemen’s Benevolent Association (“PBA”), the Police Chief advised Plaintiff that neither he nor any other officers were to have any influence from the PBA. Nevertheless, Plaintiff joined the PBA. Thereafter, the Police Chief allegedly retaliated against Plaintiff, specifically by subjecting Plaintiff to smoke from cigarettes, cigars, and scented candles, charging him with insubordination, denying him an earned stipend, belittling him in front of other officers, filing frivolous internal affairs claims against him, and denying him the opportunity to attend career-advancing classes and seminars.

Plaintiff’s complaint asserted six claims: (1) violation of 42 U.S.C. §1983; (2) intentional infliction of emotional distress against the Police Chief; (3) hostile work environment; (4) negligence; (5) intentional interference with prospective economic advantage against the Police Chief; and (6) conspiracy. Both the Borough and Police Chief filed motions to dismiss the complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). Thereafter, the United States District Court for the District of New Jersey entered an opinion and order granting the motions. This appeal followed.

The United States Court of Appeals for the Third Circuit affirmed the District Court’s ruling in part, reversed in part, and remanded the case for further consideration. Specifically, the Third Circuit affirmed the dismissal of all but one of Plaintiff’s claims for failing to file a notice of claim under the New Jersey Tort Claims Act. However, the Third Circuit determined the District Court erred in dismissing Plaintiff’s §1983 claim. The Third Circuit held the retaliation claim was not barred by the statute of limitations and should be remanded to the District Court to be adequately analyzed as a claim based on freedom of association.

This case illustrates the importance of obtaining an experienced, qualified attorney prior to initiating an action similar to the one recounted above. There are many procedural hurdles one must follow, to include filing certain notices, to perfect the filing of such a claim. Consequently, it is imperative one obtains a qualified, experienced attorney to ensure their rights are protected. Moreover, this case shows that viable retaliation claims can be pursued against public employers. With the right set of facts, many courts are willing to explore such a claim and, potentially, hold the employer liable for infringing on one's right to join a certain collective bargaining unit.

Petitions for Interest Arbitration are Increasing as Municipalities Tighten Their Belts

Jerry DeMarco, a reporter with the website www.examiner.com has reported that significantly more police unions around the state are turning towards interest arbitration as a means to settle their contract due to the hard line stance that many municipalities and county governments have taken during negotiations.

DeMarco reported that the average salary increase for arbitration awards dipped slightly last year, to 3.73 percent from 3.77 percent, according to the New Jersey Public Employee Relations Commission (PERC). Furthermore, salary increases from voluntary settlements averaged 3.92 percent, down from 3.97 percent in 2007. PERC records show that in Northern New Jersey, nearly a half-dozen awards made by arbitrators this year average 3.92 a year in their overall impact on police salaries over the life of the contracts.

The article further reports that a long-running contract dispute in Englewood, New Jersey, finally ended in December, with police getting a 4% hike for 2007 through 2009, and a 3.8% increase for 2010. Fort Lee police, similarly, got 4%for 2007 and 2008 and 3.5%for 2009 and 2010.  North Arlington police, who filed for arbitration nearly a year ago, were awarded 15.25%over four years in September, 2008.

Interest arbitration is always a viable option for dispute resolution when public safety unions reach an impasse with their governmental employers. The Police and Fire Public Interest Arbitration Reform Act is the statute that governs interest arbitration within the state of New Jersey; and should a public safety collective bargaining unit make the decision that contract negotiations have reached an impasse, this act will be the controlling piece of legislation in the arbitration process. 

Prior to filing for interest arbitration, it is advisable that the union’s executive board familiarize themselves with the Police and Fire Public Interest Arbitration Reform Act, and the criteria that is utilized by arbitrators in issuing an award. Furthermore, the collective bargaining unit should ensure that they do not walk into the arbitration process alone. It is imperative that they consult with and hire competent counsel prior to the initiation of the petition for interest arbitration.

 

Blanket Strip Searches of Non-Indictable Offenders, Performed Without Reasonable Suspicion Are Unconstitutional

In the matter of Florence v. Board of Chosen Freeholders of the County of Burlington, Civil Action No. 05-3619, the United States District Court, District of New Jersey, addressed the issue of strip searches of non-indictable offenders.

Plaintiffs consisted of a certified class to include all arrestees charged with non-indictable offenses, which were processed at Burlington County Jail and/or the Essex County Correctional Facility and were strip searched without a reasonable belief that they were concealing contraband, drugs, or weapons. Defendants were the Board of Chosen Freeholders of Burlington County, Burlington County Jail, Warden Juel Cole, Essex County Correctional Facility, Essex County Sheriff’s Department, and several John Does.

Plaintiffs sought summary judgment on the issue of whether Defendants violated Plaintiffs’ constitutional rights by their policy of strip searching non-indictable arrestees without reasonable suspicion. Plaintiffs also sought injunctive relief on behalf of the class against the correctional facilities’ strip search policies.

In response, Defendants also sought summary judgment as to whether the strip searches were constitutional. In addition, Defendants sought summary judgment on the following issues: (1) 11th Amendment immunity for the Board of Chosen Freeholders of Burlington County, Burlington County Jail, and Warden Cole in his official capacity; (2) qualified immunity for Warden Cole in his individual capacity; and (3) the dismissal of count five involving section 1983 municipality custom violations regarding Essex County.

The District Court held that blanket strip searches of non-indictable offenders, performed without reasonable suspicion for drugs, weapons or other contraband are unconstitutional. Specifically, the Court indicated that the search policies at Burlington and Essex County jails do not pass constitutional muster under the balancing test set forth by the U.S. Supreme Court in Bell v. Wolfish. The Court also determined the justification for the blanket policy is not compelling, where it is based on general security concerns and health concerns, as nothing prohibits jail officials from searching non-indictable offenders, assuming they have reasonable suspicion to do so.  

Based upon its finding that blanket strip searches of non-indictable offenders, performed without reasonable suspicion for drugs, weapons or other contraband, are unconstitutional, the Court granted Plaintiffs’ motion for summary judgment. As to a remedy, the Court denied Plaintiffs’ motion for injunctive relief on account of a lack of standing, since Plaintiffs have failed to show irreparable harm in that they are unlikely to be subjected to strip searches in the future. 

Lastly, the Court denied Defendants’ Motion to dismiss in its entirety. The Court found Defendants’ arguments and factual averments are too scant to support a finding of 11th Amendment immunity and Plaintiffs’ factual allegations regarding municipal liability under section 1983 sufficiently complied with pleading requirements under Federal rules. Finally, the Court determined Warden Cole was not entitled to qualified immunity since a constitutional violation was present and Warden Cole ought to have been put on notice that the strip search policy was unconstitutional.

Legislative Proposal Seeks to Provide Law Enforcement Officers Pay Status When Appeals of Termination Are Not Resolved Within 180 Days

 

This blog entry will focus upon our review of certain statutory proposals currently pending in the New Jersey Legislature concerning the pay status of law enforcement officers when appeals of termination are not resolved within 180 days. These proposals are set forth in Assembly Bill Number 3481

Assembly Bill 3481 concerns the suspensions of certain law enforcement officers and firefighters and supplements Title 40A of the New Jersey statutes and specifically amends N.J.S.A. 40A:14-150 and N.J.S.A. 40A:14-22. In essence, the bill allows certain law enforcement officers and firefighters to regain pay status when appeals of termination are not resolved within 180 days.

The first part of the bill provides:

When a law enforcement officer employed by a law enforcement agency…that is subject to the provisions of Title 11A of the New Jersey Statutes is suspended from performing his official duties without pay for a complaint or charges, other than (1) a complaint or charges relating to the subject matter of a pending criminal investigation…whether pre-indictment or post indictment, or (2) when the complaint or charges allege conduct that also would constitute a violation of the criminal laws of this State or any other jurisdiction, and the law enforcement agency employing the officer…seeks to terminate that officer’s…employment for the conduct that was the basis for the officer’s…suspension without pay, a final determination on the officer’s…suspension and termination shall be rendered within 180 calendar days from the date the officer…is suspended without pay.

 

Should a final determination of the discipline not be rendered within those 180 days, the proposal states that the officer shall, commencing on the 181st calendar day, begin to receive the base salary he/she was being paid at the time of the suspension and shall continue to do so until a final determination on the termination is rendered. Simply put, this addition to the statute would allow officers who are suspended without pay to begin collecting their base pay once again if the appeal of their termination is not resolved within 180 days. It goes without saying that this addition helps to alleviate the problem many officers find themselves in currently, namely being economically starved for an extended amount of time while trying to challenge their removal from employment.    

The proposal also instructs how the 180 day period should be calculated. While the 180 day period seems to be a favorable time period for the officers, it is important to note that this time period might be significantly extended and keep an officer without pay for a period much larger than 180 days. For example, time periods such as: (1) the period between an officer’s termination and the date on which his/her appeal is filed; and (2) the days that accrue during a postponement, should an officer have requested one, will not toll the 180 day period. Therefore, it is imperative that New Jersey public safety officers become intimately familiar with the events which can extend the 180 day time frame should this bill be accepted into law. That way, the officers can maximize their resources efficiently so as to ensure the time frame without pay remains as close to the 180 days as possible.

Next, it is important to note that if the Civil Service Commission denies the officer’s appeal, the officer will be required to reimburse his employing agency or department all of the base salary received during the period of the appeal. Put another way, if an officer has been receiving his base salary after the 180 day period expired and he/she ultimately loses, the officer has to pay all the monies he or she has received. Moreover, the proposal provides that if an officer fails to reimburse the employing agency for the payments, the employing agency may obtain a lien for those amounts on any property and income of the officer, including the officer’s pension, sick and vacation leave to which the officer is entitled.

Finally, the bill directs the Director of the Office of Administrative Law to establish a special unit, known as the Law Enforcement and Firefighter Unit, to deal with removal cases. The unit will be made up of Administrative Law Judges who are qualified and experienced in disciplinary matters and cases which fall under the purview of this statute. As a result of the establishment of this unit, the Office of Administrative Law will be better able to adhere to the 180 day time frame which will, potentially, result in quicker resolutions than what is currently being experienced for all parties involved.

Based on our review of these proposals, I am of the opinion that while many of the proposals are favorable to New Jersey public safety officers, the benefits are somewhat misleading. I believe the Legislature in: (1) installing a deadline for resolving cases regarding the termination of an officer; (2) allowing the officer to regain pay status when appeals are not resolved within that deadline; and (3) establishing the Law Enforcement and Firefighter Unit addresses a number of important concerns, namely forcing these types of cases to be resolved in an expedited fashion and allowing officers certain financial alleviation should an appeal persist for an extended amount of time.

However, (1) the various ways in which the 180 day deadline could be significantly extended; (2) the provision providing reimbursement to the employment agency in the event the appeal is unsuccessful; and (3) permitting a lien on an officer’s property to include his/her pension, severely undermines many of the advantages of the bill. Therefore, it is important that, if this bill passes, officers are mindful of what it specifically includes, excludes, and requires by way of affirmative action on the part of the member or association. Our office will keep apprised of the bill’s progression through the Legislature so make sure to check this blog periodically to ascertain any updates.

Officer's Resignation Not Attributed to Duress, Upheld

 

In In the Matter of Thomas F. Fricano, Borough of Freehold, Docket No.: A-2280-07T3, the Appellate Division addressed Appellant Thomas Fricano’s appeal from final decisions of the Merit System Board (“Board”), dated September 27, 2007 and December 7, 2007, upholding his resignation in good standing from the Borough of Freehold Police Department.

By way of background, Fricano received a regular appointment as a police officer in Freehold on April 3, 2006. The appointment was subject to the successful completion of a one-year probationary working test period, commencing after completion of a police training course. On February 2, 2007, Fricano, in a written letter, resigned to pursue other opportunities in law enforcement. The appointing authority accepted the resignation, which was made effective February 22, 2007. 

The circumstances surrounding Fricano’s resignation are in dispute and at the core of the appeal. According to Fricano, on February 2, 2007, after having served ten months of his one-year probationary working term, he was summoned to the office of the Police Chief. Allegedly, the Chief ordered Fricano “to resign or be terminated immediately.” Denied his request for legal representation or to have a PBA representative present, Fricano drafted and submitted a letter of resignation under duress and coercion. Thereafter, on February 16, 2007, Fricano’s counsel wrote to the Chief requesting that he be able to rescind the resignation. The Borough attorney advised Fricano that he would not be reinstated, instead stating that “they could have fired him instead.” Subsequently, on March 13, 2007, Fricano was issued a preliminary notice of disciplinary action, charging him with numerous violations. On March 22, 2007, the appointing authority withdrew the charges and, thereafter, on March 28, 2007, issued Fricano a letter indicating that he did not satisfactorily complete his working test period and that he was being terminated effective April 3, 2007.

The Borough offers a different version. When called to his office, the Chief advised Fricano that his performance during the working test period had not been satisfactory, and, therefore, offered him the option to resign effective February 22 or face termination for failure to satisfactorily complete his working test period. This offer was made so that Fricano could avoid any stigma which might attach to an involuntary termination. Fricano decided to resign and submitted a resignation letter the same day. In the letter, Fricano explain that he resigned to pursue “a different choice in the Law Enforcement Career.” Although he did not work after February 2, he was paid through February 22, and his resignation was recorded effective February 22, 2007. After being subsequently informed of Fricano’s intention to challenge his resignation, the police department issued the preliminary notice of disciplinary action on March 13, 2007. On March 22, 2007, the police department withdrew the charges and, instead, as a cautionary measure, issued a letter to

 

Fricano informing him that he had not successfully completed his working test period. 

Thereafter, Fricano filed an administrative appeal challenging his resignation. In a September 27, 2007 decision, the Board upheld the resignation, finding insufficient evidence that Fricano’s resignation was the product of duress or coercion. This appeal followed.

The Appellate Division affirmed the Board’s finding that Fricano voluntarily resigned his position. The Court determined there was sufficient credible evidence that Fricano was told he would be terminated because he had not satisfactorily performed during his working test period. Moreover, the Court found that Fricano voluntarily chose to accept the offered opportunity to resign to avoid any stigma attached to termination. According to the Court, Fricano’s deliberate choice of available alternatives cannot, under the circumstances of this case, be ascribed to duress.

Discipline Regading Dissemination of Internal Affairs Documents Upheld

 

In Division of State Police v. In the Matter of Detective Sergeant First Class Daniel Flaherty, Docket No. A-0257-07T20257-07T2, the Appellate Division addressed the validity and ultimate imposition of disciplinary charges lodged against a Detective Sergeant of the New Jersey State Police. The appeal arose out of disciplinary charges filed by the New Jersey Division of State Police (“Division”) against Detective Sergeant First Class Daniel Flaherty, charging him with: (1) disseminating Division documents without proper authorization; (2) behaving in an official capacity to the personal discredit of a member of the State Police or to the Division; and (3) willfully disobeying a lawful verbal or written order.

The underlying facts of this case were not substantially in dispute. In 2001, Flaherty filed an age discrimination complaint with the New Jersey State Police Equal Employment Opportunity/Affirmative Action (“EEO/AA”) intake unit. He alleged that since 1995, the State Police had denied him numerous specialist positions because of his age. The EEO/AA assigned Lieutenant Patrick Reilly to investigate his claim. After two years, in which the allegations still had not been resolved, the EEO/AA replaced Reilly with DSFC Kevin Rowe.

On May 5, 2003, Flaherty filed a New Jersey State Police Reportable Incident Form alleging “culpable inefficiency” against Reilly. Pursuant to a Division policy regarding non-disclosure of confidential internal investigations, the Office of Professional Standards (“OPS”) denied his request to access the file regarding his complaint against Reilly.

The following month, the State Police administratively closed Flaherty’s complaint file against Reilly and transferred the matter to the Attorney General’s EEO/AA section. In a letter dated September 24, 2003, a Senior Deputy Attorney General informed Flaherty that his claim against Reilly could not be substantiated. 

Thereafter, on May 31, 2003, the Division assigned Flaherty to the OPS, which was then called the State Police Internal Affairs Investigation Bureau. Pursuant to Division of Internal Affairs policies and procedures, “[t]he nature and source of internal allegations, the progress of internal affairs investigations, and the resulting materials are confidential information. The contents of internal investigation case files shall be retained in the internal affairs unit and clearly marked as confidential.” Notwithstanding these provisions, internal investigation files can be released in certain enumerated circumstances.  As such, Flaherty executed a confidentiality agreement which provided the dissemination of all confidential information and/or documents.

In a letter dated February 20, 2004, the Department of Law and Public Safety found that Flaherty’s age discrimination claims could not be substantiated. In his appeal to the Department of Personnel, Flaherty questioned the manner in which the State Police and the Attorney General’s office investigated his

 

discrimination claims and his complaint against Reilly. Attached to the appeal were several documents from OPS internal investigation files relating to Reilly and several documents from the internal investigation file regarding his culpable inefficiency claim against Reilly. He also claimed that two other State troopers had filed reportable incident forms against Reilly, specifically citing to one of the internal investigation files.

The Department of Personnel acknowledged receipt of Flaherty’s appeal and forwarded a copy of same to the Attorney General’s office. In responding to the appeal, it became apparent Flaherty might have breached confidentiality by attaching Division documents from internal investigation files. Consequently, an investigation was commenced regarding Flaherty’s acquisition and dissemination of several of the documents referenced in and attached to his appeal. After the investigation, on August 25, 2005, the Division filed the above referenced disciplinary charges against Flaherty. 

The case was ultimately transferred to the Office of Administrative Law. The Administrative Law Judge (“ALJ”) assigned to the case granted a summary decision in favor of the State on charges one and three, dismissed charge two, and ordered Flaherty suspended from duty for five days without pay. After the State filed exceptions seeking to increase the penalty and Flaherty challenged the grant of summary decision as well as the penalty, the Superintendent of the State Police issued a final decision on August 1, 2007, upholding the summary decision on charges one and three, but increasing the suspension to ten days. This appeal ensued.

On appeal, Flaherty asserted: (1) genuine issues of material fact precluded summary decision; (2) the ALJ failed to consider relevant evidence; (3) the ALJ applied the incorrect burden of proof; (4) the Superintendent erred by adopting the Department of Personnel’s finding that his discrimination claims were “unsubstantiated”; (5) the Superintendent erred in asserting that he has “absolute discretion” to promulgate rules and regulations; (6) he was unfairly charged with two violations based on the same facts; and (7) the ten day suspension is disproportionately harsh.

The Appellate Division rejected all of Flaherty’s arguments and affirmed the Superintendant’s decision. According to the Court, the record sustained the ALJ’s grant of summary decision imposing disciplinary action on Flaherty for attaching the records from the Internal Affairs Unit of the State Police. The Court determined Flaherty knew the records he attached to and referenced in his appeal were confidential. Moreover, the Court noted Flaherty even executed a confidentiality agreement which specifically prohibited such dissemination. As such, the Court held the ten day suspension was not disproportionately harsh and sustained the findings of the ALJ and Superintendent.

Distinction Between Public and Private Speech

 

In Brennan v. Township of Fairfield, the United States District Court for the District of New Jersey addressed an important topic for public safety officers, freedom of speech. In this case, Plaintiff, a police officer, alleged he was retaliated against for distributing a memorandum on police letterhead to the Mayor and Township Council. The memorandum contained the officer’s reasons for having issued two motor vehicle summonses to a township administrator.   

Defendants moved for summary judgment of plaintiff’s claim. The Court granted the motion because Plaintiff’s speech was made pursuant to his duties as a police officer. Therefore, his speech was not protected by the First Amendment. In addition to seeking summary judgment, Defendants also moved for sanctions against Plaintiff for the assertion of a claim which Plaintiff later withdrew. The Court denied this motion along with Defendants’ other motions to disqualify counsel and to compel mediation.   

This case, although very brief, illustrates how one’s freedom of speech can be limited based on the context in which the speech is offered. Speech made pursuant to one’s duties as a public safety officer will not be protected by the First Amendment, thereby negating support of a retaliation claim. As a result, it is important for public safety officers to be cognizant of the distinction between speech made pursuant to their employment from all other forms.

Arrest of Undercover Agent Gives Rise to Various Claims

 

In Frohner v. City of Wildwood, the United States District Court for the District of New Jersey addressed a very unusual and interesting factual scenario. The lawsuit asserted numerous claims arising out of the arrest and handcuffing of plaintiff, an undercover FBI agent, by defendants, local police officers. Defendants suspected plaintiff was a motorcyclist impersonating an FBI agent.

Defendants moved for summary judgment on a variety of plaintiff’s claims. First, the Court denied defendants’ motions as to the false-arrest claims because defendants failed to show as a matter of law that they had probable cause or arguable probable cause to believe plaintiff was impersonating an FBI agent. Next, the Court denied defendants’ motion as to the claim that defendants’ conducted an unlawful search and seizure of plaintiff’s car. The Court indicated that it could not be concluded that the search was incident to a lawful arrest.

The Court also denied defendants’ motion as to plaintiff’s excessive-force and punitive damages claims. The Court held that such a claim will lie for the use of excessively tight handcuffs and that expert testimony is not required. With regard to plaintiff’s punitive damages claim, the Court noted that the issue as to whether any defendant was recklessly indifferent to plaintiff’s rights was a jury question. 

Although the vast majority of plaintiff’s claims were upheld, the Court did grant defendants summary judgment on one of the claims. The Court determined that since plaintiff has not shown a pattern of constitutional violations indicating defendants were deliberately indifferent to the likelihood that constitutional violations such as those alleged in this case would occur, defendants were entitled to summary judgment on that claim.

This case shows that arrests of undercover agents by local police departments, much like arrests of everyday citizens, can give rise to various claims being brought against the departments. Even with the unusual nature of the facts of this case, this case also illustrates that Courts are typically reluctant to dismiss certain claims as long as some evidence in support thereof has been offered.